Adjustable-rate Mortgage (ARM)
A loan with an interest rate that changes periodically based on fluctuations in a specified index. Also known as Adjustable Mortgage Loans, Adjustable Rate Loans, and Flexible Rate Loans.

Amortization
Refers to the mortgage loan repayments or installments over a period of time.

Amortization Schedule
Timetable for the payment of the mortgage loan

Amortization term
The period of time specified for the payment of the loan.

Appraised Value
The estimate of the value of the real property or the property's fair market value.

Bankruptcy
A Federal Court proceeding in which a debtor who owes more than his or her assets is relieved of his debts and his assets are entrusted to a trustee.

Broker
A licensed real estate professional who undertakes buy and sell real property transactions for a fee or consideration.

Certificate of title
A document that declares the ownership of a certain property.

Contract of sale/sales contract
A contract signed by both the buyer and seller detailing the property transaction and the acceptance of the offer of purchase.

Clear Title
A title that is free or clear of all liens and claims.

Close of Escrow
The stage when the property is formally sold and the title passes from Seller to Buyer. This is the time when the sale and mortgage documents are executed and recorded, closing costs are paid and the title is given to the buyer.

Closing costs
Necessary expenses incurred in transferring the ownership of the property such as taxes, survey costs, attorney's fees, origination fee, and title insurance expense.

Collateral
An asset or property that secures the repayment of a loan.

Commission
The fee charged by a broker or agent for facilitating a transaction.

Contract
An oral or written agreement to perform or not to perform a specific act.

Conventional loan
A loan that is not guaranteed or insured by the U.S. Government; a private sector loan.

Convertibility Clause
A provision that allows a borrower in a an adjustable-rate mortgages (ARMs) to change the ARM to a fixed-rate mortgage at stated time periods.

Convertible ARM
An adjustable-rate mortgage (ARM) that can be converted to a fixed-rate mortgage under specified conditions.

Creditor
A person to whom money is owed.

Credit Report
A report of a prospective borrower's credit history used by a lender in determining a loan applicant's creditworthiness.

Deed
Written document that is used to transfer an estate or interest in real property from one person to another.

Down payment
The portion of a property's purchase price that is paid in cash or the partial payment in cash of a property.

Earnest Money Deposit
Money deposited by the potential home buyer to show his or her seriousness in the purchase of the property.

Encumbrance
Is aAnything that affects or limits the fee simple title to a property, such as mortgages, leases, easements, or restrictions.

Equity
The extent of the financial interest of the owner in the property. It represents the fair market value of the property net of outstanding mortgage on the property.

Fair Housing Act
The law that prohibits discrimination based of race, color, national origin, religion, sex, familial status, or disability in property transactions.

Finance Charge
The cost of borrowing money and other related charges.

Fixed Rate Mortgage
A type of mortgage with interest rate that is fixed for the entire period of the mortgage.

Foreclosure
A legal process in which mortgaged property is sold to pay off the loan it is secured against.

Installment
The amount of loan repayments paid on a regular basis as agreed by the borrower and lender.

Interest
The cost of borrowing money.

Interest rate
The rate used for computing the cost of borrowing money.

Judicial foreclosure
A foreclosure proceeding that is instituted through a civil lawsuit and adjudicated by the court.\

Lien
A legal claim against a property.

Loan
A sum of borrowed money.

Loan-to-value (LTV) percentage
The ratio of the principal balance of the mortgage to the appraised value or sales price of the property, whichever is lower.

Maturity
The date on which the principal balance of a loan becomes due and payable.

Mortgage
A lien on the property that secures the repayment of a loan

Mortgage Loan
A loan secured by real property through the use of a mortgage

Mortgagee
The lender in the mortgage loan.

Mortgagor
The borrower who gives his/her property as security for the repayment of the loan

Prepayment
Amount paid on the principal balance of a loan before the loan has been fully amortized or paid.

Prepayment penalty
Fee charged against the borrower for paying off a loan before end of the period of amortization.

Principal
The amount of money borrowed from the lender.

Real estate agent
A person who is licensed to negotiate real estate transactions

Refinance
Transaction involving the full repayment of the original mortgage with the proceeds from a new loan taken on the same property.

Secured loan
A loan that is secured with a collateral.

Title
Legal document evidencing a person's right to ownership of a property.

Unsecured loan
A loan that is without a collateral.